How Can I Teach Children About Saving Money?

Published February 4th, 2018 - 11:33 GMT
Here are some interesting ways to teach children how to save money at an early age. (Shutterstock)
Here are some interesting ways to teach children how to save money at an early age. (Shutterstock)

Your child looks up to you for everything. You, therefore, have a big role to play in the way he or she turns out in life. Some habits are important and you need to inculcate them in your child early in life. Among them is saving money.

Unless you encourage your children to practise saving when they are younger, it will become very difficult for them to save money when they grow up. It, however, is no mean task and requires a lot of precision and perseverance. And like everything, if you add some fun and adventure to it, the process becomes more appealing. 

Here are some interesting ways to help older kids practise saving. An older child can understand the concept of saving better. So, if you have a teenager or a pre-teen at home, start with these techniques. You will see a positive change in them soon.

The envelope style of saving

Many adults follow the envelope style of saving where different envelopes are used to save for different requirements. Give different coloured envelopes or containers to your child and ask them to draw on them. A smaller requirement, like a new toy, can have a smaller envelope. A larger target, like a new computer, can have a larger envelope. This will help them understand the importance of saving in the right volume and quantity. 

The concept of budgeting

Next, introduce your children to the concept of budgeting. Give them a lump sum amount of money before a trip or a vacation and ask them to divide the money into parts to use on the trip. They can keep a portion away for buying souvenirs, some for buying food and beverages and some to visit the places of their choice.

Open a bank account

A bank account in the name of your child won't just be thrilling for him/her, but will also make them more responsible about finances. An older child can be taught to write cheques, use the ATM card and make deposits into the bank account. It will require your constant monitoring, but the bank account will definitely teach her about saving money early on in life.

Rewards for saving

Start giving out rewards to your children for saving money. You could agree to match the amount of money they save. So, if they manage to save Dh200 a month, you can add another Dh200 to it and double their fund. This will definitely encourage them to save more. Older children can also be sent shopping for groceries and be asked to keep the money they save from the trip to the supermarket. They will then learn to value the money they have and look for economic options among the available commodities. These vital exercises will help them grow into financially sound adults.

Lead by example

Like mentioned above, your kids look up to you. So, lead by example and show them how you save money at every step. Do not indulge unnecessarily in front of your children and show them that you have to work hard to earn something. This will help them understand how valuable money is and why they should save as much as possible.

It is very important to make the whole process fun and interesting. Children do not like it when you impose ideas on them. So, practise these fun-filled saving tactics with them and you will see them blossom into responsible adults who value their money. The aforementioned guidelines are easy to follow and you must definitely give them a try. Good luck!

By Leena Parwani

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